Expanding Business Overseas Global Expansion

Expanding Business Overseas Global expansion of high-growth businesses is often done by default through intuitive or even anecdotal research, rather than by evaluating the alignment of a given firms' core strengths and cultural values to other nations' cultures. Yet this is precisely what the consultancy must do; it must look to cultural frameworks to provide insights into which nation is the best potential candidate to launch their business and software application into.

Hong Kong, Singapore, the U.S., Canada, the United Kingdom and France have all been mentioned as potential foreign markets of interest. Within each of these regions there are cultural nuances and differences that defy anecdotal analysis. What the consultancy needs to do is evaluate these nations from a cultural fit standpoint to ascertain the relative levels of risk before investing in a full-scale introduction of the firm and its software application into these nations.

The Cultural Dimensions Model of Hofstede (1993) has been used specifically for this purpose in the past. This model captures the broad dimensions of doing business aboard (Heijes, 2007) and can be a framework the consultancy can use often to define their strategies for global expansion. For the consultancy to attain the role of trusted advisor in any of the nations they serve, they need to have significant insight into cultural, individual, and societal factors that will directly influence their success or failure in any new region or country (Davis, Lee, Ruhe, 2008).

This is particularly relevant in software development and engineering (Cater-Steel, Toleman, 2008) as the pace of change is so much more rapid and requires intercultural communication. Literature Review In evaluating which specific nations to expand into with their self-assessment software, the consultancy needs to look beyond congruency or alignment and also seek to find nations that over time will deliver significant competitive advantage as well (Shriberg, Kumari, 2008).

This can be accomplished through the use of cultural frameworks that also include an assessment of attributes that measure interpersonal, collaborative and cultural factors (Tang, Koveos, 2008). The value systems measurements as created in the Hofstede Cultural Dimensions Model specifically address this issue of gaining insights into national and organizational value systems (Hofstede, 1985). The Hofstede Cultural Dimensions Model (Hofstede, 1983) is specifically designed to quantify the differences between two national cultures. Dr.

Geert Hofstede specifically created this framework to measure cultural variations between nations with the intent of assisting IBM executives assimilate faster into cultures other than their own. The Five Cultural Dimensions that comprise the model include the Power Distance Index (PDI), Individualism (IDV), Masculinity, (MAS), Uncertainty Avoidance (UAI), and Long-Term Orientation. The most significant differences are in the IDV Dimension, which is the extent to which individuals are integrated into groups.

This factor varies significantly across regions of the world and has been the one factor that has led to the most critical assessment of the Hofstede Five Cultural Dimensions Model (Blodgett, Bakir, Rose, 2008). Hofstede (1983) has noted that the higher the IDV score the more there is a strong sense of individuality throughout the given country. Conversely, the lower the score, the greater amount of collectivism or strength of group affiliation within a given nations' culture.

This is critically important for the consultancy to understand, as the self-assessment software will tend to do better in those nations with a high score on the IDV dimension of the model. As a result of the IDV metric having such a significant role in the data set, it is considered to be one of the best predictors of the level of egalitarianism present in a given nation or not.

For the consultancy, this is also important to keep in mind as to the extent there are entire segments of a given nation taking their self-assessment software tests is the extent to which word-of-mouth recommendations will also spread. The consultancy then must seek out a high level of congruence specifically on the IDV dimension if it is to be successful over time.

Using the Five Dimensions Model to plot the values of Singapore, Hong Kong, The U.S., Canada, the United Kingdom and France, the six graphics shown in Appendix A: Comparing Cultural Dimensions by Nation is created. Comparing each nation specifically shows that of the potential candidates for expansion, Singapore, Hong Kong and France are the least favorable when analyzed purely on the IDV dimension of the model.

Ironically, the team had seen Singapore and Hong Kong has having the greatest potential is actually the worst in terms of its attractiveness on the IDV dimension relative to Australia. Conversely, the United States, Canada and the United Kingdom all are more comparable to Australia on the IDV dimension of the Hofstede Cultural Dimensions Model. Next, the Uncertainty Avoidance (UAI) dimension is compared across the nations highlighted for expansion.

Considering this dimension is critical if the consultancy is to gain the trust of its new clients in the nation(s) of interest (Foscht, Maloles III, Swoboda, Morschett, Sinha, 2008). Ultimately the attainment of trusted advisor in each nation served is critical for the consultancy's success. The UAI dimension is crucial to this specific aspect of their overall strategy as it will allow them to contribute more to the reduction in risk associated with the self-assessment software and also gain greater business.

As the management consultancy's value is predicated on gaining the trust of its clients and providing insights they had not considered before, the cultural dimensions of Hofstede's Model must be taken into account in the planning and execution of any global expansion strategy. Additional dimensions of the model that are highly relevant to the consultancy include Long-Term orientation (LTO), as this must be in alignment for clients to trust them.

Conclusion The Hofstede Cultural Dimensions Model (1993) is invaluable for firms such as the consultancy who seek to expand globally as a trusted advisor. Their core business isd providing insightful guidance to clients. In order to create the best possible scenario for gaining client trust, the constantly needs to be cognizant of five cultural dimensions as defined by Hofstede (1003) and plan accordingly. The analysis.